Alex AngelovThomas Huggins

Malgorzata Glowa-WillemseClarice Da Silva

Pawel Rogalewski

Introduction Definition of ‘power’ & ‘politics’ Who’s to blame and how it happened? US Government response to the crisis Stakeholders and media involvement BP reaction during the crisis Managing post crisis change effectively &

recommendations Conclusion

Oil Spill disaster on 20th April 2010, Deepwater Horizon exploded after a blowout and sank two days later, killing 11 people and leaving many injured. The oil spill flowed for three months till July 15.

It was a biggest hit for BP and its public relations, and as a direct effect reduced its share prices drastically.

The oil spill in the Gulf of Mexico not only resulted in an environmental disaster of enormous scale, but it ignited antagonism toward BP’s brand identity.

Deepwater Horizon was not the first disaster linked to the BP brand, but the oil spill in the gulf is unprecedented in its explicitness.

http://upload.wikimedia.org/wikipedia/en/d/d4/Transocean_Logo.png

Obama’s continuing efforts to reverse public opinion against BP has more reasons.

If Obama will blame the other involved companies from irresponsibility instead of BP, it will never be so much discussed topic and nobody will force BP to pay for cleaning up of the coast.

Power concerns the capacity of individuals to exert their will over others.

Political behaviour is the practical domain of power in action, worked out through the use of techniques of influence and other(more or less extreme) tactics. (Buchanan and Huczynski)

Power is “the ability to get things done the way one wants them to be done”(Pfeffer 1992).

Lack of ethics, lack of regulation, corruption, hypocrisy, personal gain greed, complacency

BP – with its controversial health & safety record Minerals Management Service - ‘dysfunctional, riddled with conflicts of interest and

unprofessional behaviour’ but still collects about $10 billion a year (Savage 2008)

Halliburton- associated with Dick Cheney (Hoffman & Jennings 2011 p.5)

Transocean- has a history of accidents: - a Scotsman killed aboard a drilling rig (BBC News 2002) - Bourbon Dolphin supply boat sank off the coast of

Scotland killing 8 people (Offshore Shipping 2008) - two people were killed on Transocean vessels in 2008

(Smith & Casselman 2010) - Deepwater Horizon drilling explosion in 2010

killing 11 people

The Interior Department – Mineral Management Service

BP – Congress and environmental groups complain about BP’s lack of readiness to handle the spill but are overlooking some key facts:

- Statistical models last updated 2004- Not tested sufficiently to use in deep water- Deepwater Horizon 35,050ft vertical depth

(largest drilled well in history) (King and Johnson 2010)

“There’s enough responsibility to go around, and all parties should be willing to accept it,” Obama said. "That includes, by the way, the federal government.”(Johnston and Brower 2010)

(King and Johnson 2010)

The U.S government were not prepared and were also too slow to respond to the crisis

- Obama claims to be on top of things from the beginning

“I take responsibility. It is my job to make sure that everything is done to shut this thing down.” – Barack Obama (May 27th)

(The Economist 2010)

Government officials need to think carefully before taking actions

- Suspending the BP quarterly dividend for shareholders (Angered many people)

1. Make sure that statistical oil spill data models from the Minerals Management Service used are up to date and accurate.

2. Make sure you know all your stakeholders and their needs before taking drastic actions.

3. Make sure that oil companies drilling have oil containment equipment ready.

Consumers used social networks, such as Facebook and Twitter to start boycotting and commenting on BP. Group BP boycott on Facebook had over 181,600 members and Twitter BP Global PR had over 75,800 followers (Business Insurance 2011)

Varsvarovsky and Brugha described stakeholders as actors who have interest in the issue under consideration, who are affected by the issue, or who – because of their position – have or could have an active or passive influence on the decision-making and implementation process.

Possession of resources related to perception of action (Zaleznik, 1970)

BP and its employees Transocean Ltd who leased the rig to BP Halliburton who was in charge on

cementing and testing the wellhead Engineering firms and the regulators Gulf States community (who suffered

greatly after the spill) High – status players – United States and

Britain, and associated national – level agencies (Hoffman and Jennings 2011)

As a result of the tragedy and negative exposure of company’s name in the world, its market value has dropped 40 per cent since April 2010 in all aspects, financial, political, reputation and image (BBC News 2011)

BP sent the wrong message saying that the company would pay only what would be appropriate for "legitimate legal claims".

Mr Bernstein said. “It's clear that BP didn't have a crisis response plan in place before this happened, even though this is something that is predictable in their line of work and that is inexcusable.” (Business Insurance 2010)

Benoit argued that doesn’t matter what happened. It is not important whether the firm in fact is responsible for the offensive act, but whether it is thought to be responsible for act by the relevant audience. (Benoit 1995)

“Our goal of ‘no accidents, no harm to people and no damage to the environment’ is fundamental to BP’s activities,” stated the company’s Sustainability Review 2009. “We work to achieve this through consistent management processes, on-going training programmes, rigorous risk management and a culture of continuous improvement.” It added that “creating a safe and healthy working environment is essential for our success. Since 1999, injury rates and spills have reduced by approximately 75%.” (bp.com)

2005- A Texas City refinery explosion- 15 people dead, more than 170 injured (Mauer & Tinsley 2010)

2006-2008- series of accidents in Texas City, 3 people dead (Bower 2010)

2009- North Sea helicopter accident (Byers 2009)

2010- DEEP WATER HORIZON WELL EXPLOSION- 11 people dead and an environmental disaster (Hoffman and Jennings 2011 p.1)

The Exxon Valdez disaster of 1989 caused 10.8 million gallons of oil to be released into the Prince William Sound, a figure which when compared to the current Gulf situation, seems relatively minor.

The company paid 2.5 billion USD towards clean up efforts, 1.1 billion USD in settlement costs and a 5 billion USD. (Business Insurance 2011)

Media outlets may criticize BP for their failure in handling the crisis expeditiously and cutting corners to save on cost, but what company hasn't cut corners to save on business expenses?

Addressing public concerns, Obama described the growing spill as “an assault on the shores and citizens of the Gulf region’’ (Business Insurance 2011)

BP has gone on record assuming responsibility for the oil spill.

BP decided to create a $20 billion response fund to alleviate the pressure caused by the spill.

On the surface, BP and the U.S. government seemed to be working together in order to correct the situation.

Managing issues Planning and prevention Managing the crisis Post-crisis

Crises expose dysfunctional organizational cultures

Leaders must recognize when a crisis can't be spun

Leaders need to work together rather than scoring points or deflecting blame

Leaders are there to serve their companies, people and communities

True leadership exists beyond title and office — elected leaders should remember this.

In order for any company to execute successfully, the right people have to be involved with the right decisions. BP provides a devastating example of what can happen when this isn’t the case. Obviously, this lesson is even more critical when there is as much at stake as there was in the BP disaster.

But really for any company trying to gain footing in a constantly changing business environment and tough economy, empowering the right people to make the right decisions can be the difference between landing that next great customer or account or not.

BP received much of the blame for this disaster, and that blame resulted in the need to re-build, reputation, strategy and confidence

Leading up to and after the oil spill BP violated almost all the guidelines of effective execution, including lacking an effective structure and lacking clear accountability.

These gaps created another problem for them: In the critical stages following the spill, BP was unable to get input from those who had the knowledge and experience to make the best decisions about how to handle it.

What’s more, BP failed to empower people to use their best judgment and take appropriate action.

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GONGLOFF, M. 2007. FT Data: Is Shell’s Record Worse Than BP’s? [online]. Available from: http://blogs.wsj.com/environmentalcapital/2007/03/20/ft-compares-deaths-at-oil-majors / [Accessed 15/3/2011] MAUER, R. and TINSLEY A. R. 2010. Gulf Oil Spill: BP Has a Long Record of Legal, Ethical Violations. [online]. Available from: http://www.mcclatchydc.com/2010/05/08/93779/bp-has-a-long-record-of-legal.html#ixzz0nZaTzdqN [Accessed 15/3/2011]NATION MASTER. 2007. Energy Statistics. [online]. Available from: http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption [14/3/2011] OFFSHORE SHIPPING. 2008. Commission Report on Bourbon Dolphin. [online]. Available from: http://www.oilpubs.com/oso/article.asp?v1=7276 [Accessed 14/3/2011]SAVAGE, C. 2008. Sex, Drug Use and Graft Cited in Interior Department. [online]. Available from: http://www.nytimes.com/2008/09/11/washington/11royalty.html [Accessed 14/3/2011] SMITH, R. and CASSELMAN, B. 2010. Rig Owner Under Scrutiny. [online]. Available from: http://online.wsj.com/article/SB10001424052748703969204575220552092667436.html [Accessed 10/32011] THE TELEGRAPH. 2010. It’s 10 Biggest Shareholders. [online]. Available from: http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7802978/BP-its-10-biggest-shareholders.html# [Accessed 12/3/2011]

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